Price pressure will persist in the coming months, but in the spring of 2025, inflation will begin to slow down.
Inflation in Ukraine has begun to grow in recent months. However, the rate turned out to be slightly higher than predicted, so by the end of the year it may reach 9.7%.
This was announced by the head of the National Bank of Ukraine Andriy Pyshnyy at a briefing at the NBU.
“In September, inflation accelerated to 8.6% in annual terms and continued to grow in October. The increase in price pressure in the second half of 2024 was expected and was assumed by preliminary forecasts of the NBU (Inflation reports for January, April and July 2024). Both consumer and core inflation (7.3% y/y in September) turned out to be higher than forecast,” Pyshnyy noted.
According to Pyshny, the key factor in this dynamic is the rise in prices for food products due to worse-than-expected harvests of various agricultural crops and the corresponding increase in the cost of raw materials for the food industry.
According to the head of the NBU, the acceleration of inflation was also due to a further increase in production costs, including electricity and labor costs, and exchange rate effects due to the weakening of the hryvnia in previous periods.
“In the coming months, price pressure will persist due to the further influence of factors on the supply side of food products, the expansion of budget expenditures, high rates of wage growth and an increase in energy deficit during the heating season,” Pyshny added.
At the same time, in the spring of 2025, inflation, according to his assumption, will begin to decline.
“The NBU forecast envisages a decrease in inflation to 6.9% at the end of 2025 and its reduction to the target of 5% in 2026,” he summed up. head of the NBU.
Recall that in Ukraine, as a result, there is a structural deficit of currency.